Bringing a multiplex theater to Elizabeth City will cost almost $550,000 in tax breaks, based on a new city report.

Earlier this month, city officials confirmed that a new company, Albemarle Theaters, is planning a $10 million, eight-screen multiplex along Halstead Boulevard Extended. They also reported the company is asking for property tax breaks from both the city and Pasquotank County to make the project work.

New city documents estimate the costs and benefits of those property tax breaks. A memo from City Manager Rich Olson shows that Albemarle Theaters would get 100 percent of their property tax bills rebated in the theater's first year of operations. That equates to $46,000 in city property taxes and $53,000 in county taxes. The percentage of rebated property taxes would shrink by 10 percent a year from there, meaning the breaks would end entirely after a decade.

In total, Olson estimates the movie theater would get back about $252,000 in city property taxes and $293,000 in county property taxes. He noted those estimates are based on the city and county's current tax rates and an estimated taxable value of $7 million for the theater.

To put those amounts in perspective, $252,000 is roughly equal to the revenue generated in one year by 2 cents' worth of the city's property tax rate. The county grant of $293,000 is equal to a little less than 1 cent's worth of the county property tax rate.

What would the developer have to do to qualify for those tax breaks? That would be spelled out in a “Business Investment Program” agreement Olson shared with The Daily Advance on Monday. The agreement is still in draft form and neither the city council nor county commissioners have approved it yet.

The agreement provides that Albemarle Theaters would have to invest at least $8 million in the project, or $2 million less than what it's expected to spend. It would also have to “take material steps” towards opening the theater, such as making purchase orders or starting construction, within one year of the incentives' approval. It would also have to pay its full property tax bill each year, after which the city and county would verify it's met the agreement's requirements and then rebate the appropriate amounts.

The agreement also requires Albemarle Theaters to “create and maintain” at least three full-time jobs and 15 part-time jobs. The full-time jobs' wages must meet or exceed the average wage for Pasquotank County – subject to change but currently about $33,000, the agreement notes – and the part-time jobs must pay at least the state minimum wage.

The agreement doesn't require the movie theater generate more in tax revenue than the grants will cost, but Olson estimated it will still be a net revenue source for the city and county. He estimated the city and county will still keep about $462,000 of the $1 million in property taxes the theater would generate over its first decade. That doesn't include additional sales tax revenues, he noted.

The agreement's terms match the normal terms of the city-county Business Investment Program, making it less generous than the Business Investment Program agreement granted to the Tanglewood Pavilions shopping complex in 2013. The city and county approved granting the complex rebates on 100 percent of its property taxes until 15 years have passed or it gets $2.2 million in rebates, whichever comes first.

Olson said Monday the city and county approved those more generous terms because the complex was a bigger project, with more than $20 million invested, that offered more economic impact.

Citizens who support or oppose the business incentives will have chances to speak about them. The Elizabeth City City Council held a public hearing about the incentives on Monday, but scheduled a second one on Feb. 12. They called for another one after city staff determined the notice for the first public hearing didn't contain enough information.

As for Pasquotank County, County Clerk Lynn Scott said the county is aiming to hold its public hearing on Feb. 5.